OPEC prefers lower oil price
OPEC would prefer to see lower world oil prices and is leaking enough extra supply to stabilise a market now near post-Iraq war highs, cartel President Purnomo Yusgiantoro of Indonesia has said.
Purnomo, Indonesia’s oil minister, said on Thursday OPEC expected prices to fall as northern hemisphere winter demand ebbed.
He said an expected cut in output when ministers met in February was not a foregone conclusion.
“We would like to have prices a little bit down, at the top end of the ($22-$28 OPEC) range,” Purnomo said.
“OPEC has contributed what is necessary to produce to stabilise the price.”
Purnomo said leakage by OPEC, estimated at 1.55 million barrels a day, or 6% over official output limits, was helping to contain prices.
“The member countries are fully aware that they need to stabilise prices at times like now. That’s the name of the game,” he said.
OPEC officially targets a $22-$28 a barrel range for a basket of crudes, but has allowed prices to stay higher than that in recent weeks, citing the impact of the weak dollar on member countries’ purchasing power.
No quota changes
The reference basket was last valued at $30.33 a barrel, with benchmark US crude futures trading on Thursday at $33.60
a barrel after hitting a nine-month high on Tuesday of $34.35.
Purnomo reiterated OPEC had ruled out any change in production quotas until its next meeting in Algiers on 10 February.
He said it was too early to judge whether or not OPEC would need to trim production then to counteract lower second-quarter demand.
“I would say it’s really too early to say. A lot of analysts are saying that OPEC is meeting in Algiers to cut production but I would not say that yet,” the OPEC president said.